611.90D/7–1054
The Ambassador in Pakistan (Hildreth) to the Department of State
No. 14
Subject:
- United States Policy Toward Pakistan
The present critical economic situation of Pakistan and the urgent appeal of the Government of Pakistan to the United States for quick additional economic assistance (Embassy telegrams No. 5, July 1 and Joint State—FOA telegram No. 19, July 7)1 bring into immediate highlight considerations of basic American policy with respect to Pakistan.
A series of actions during the past year has increased the stake of the United States in Pakistan. The most important of these actions, in addition to a developing program of technical assistance and economic aid, have been the wheat gift, the pact between Turkey and Pakistan, and the mutual defense assistance agreement. This closer relationship between Pakistan and the United States, while openly aligning this government with the forces of the free world, has at the same time increased the expectations of the Government of Pakistan and produced a feeling akin to one of dependence on the United States. The developments in East Pakistan make this particularly true.
Foreign policy can be determined in advance and then implemented by studied, planned actions. It can also result from a series of actions whose significance in their sum total may not have been appraised and analyzed in advance. The Embassy believes that the present request for substantial sums of additional economic aid presents the opportunity and suggests the need for examination of the policy of the United States toward Pakistan in the sum total of its various aspects, intended objectives, and prospects for accomplishment.
One may start with the proposition that it is in the interest of the United States that Pakistan develop as a free nation, politically stable, [Page 1852] economically sound, anti-communist in ideology, capable of defense against aggression and of participation in the defense of the area. These ideas are generally either explicit or implicit in the military aid agreement which the United States and Pakistan have signed. The unanswered questions relate to the degree of importance which the United States may attach to these objectives, in the light of our worldwide commitments, and to judgments of Pakistan’s abilities to attain these objectives. Out of the answers to these questions must come the decision as to what the United States investment in Pakistan should be.
The answer to the first question is beyond the competence of the Embassy. It involves policy and strategy toward the entire Middle East as well as South and Southeast Asia and an assessment of the importance of this area in relation to other parts of the world and to global strategy. The crux may be brought out in the question: Do we want to help Pakistan to develop sufficient strength to complement that of Turkey? If so, and if we believe in Pakistan’s ability to so develop with help, then the magnitude of our future investment assumes some calculable shape. If not, we must adjust our investment to a more modest goal. With respect to the second question, the Embassy can set forth its best judgments as of the present time. However, such judgments must be subject to continuing research and examination both in Pakistan and in Washington; subsequent facts, events, and conclusions may affect them materially.
Political factors. The political stability of the country was threatened by the events leading up to the imposition of Governor’s rule in East Bengal. Law and order appear to have been restored and the vigorous and imaginative Governor, Major General Iskander Mirza, may be able to do much to improve conditions in the province. Nevertheless the question of what follows Governor’s rule remains unanswered. The Muslim League is thoroughly discredited and shows few signs of rejuvenation while the United Front offers no hope. Some new political force with dynamic attraction is needed. None is on the horizon. In the meantime competent observers express the opinion that East Bengal is ripe for communism. Consequently the postponement of democratic processes with a longer continuation of Governor’s rule than at first expected might in the end save the province. One should not forget that with the tide of communist advance in Southeast Asia, East Bengal might offer an attractive and little noticed target to the planners of the Asian Cominform.
The Embassy does not foresee a change in the Central Government of Pakistan. No reason is seen to change the opinion expressed in Embassy despatch No. 651 of April 10, 19542 to the effect that the present [Page 1853] “ruling group” would continue. This group is anti-communist, pro-American, is fully supported by the Pakistan military, and is powerful enough to maintain political stability within the country.
With respect to foreign affairs, relations with India appear to go along on a low plateau, with mutual recrimination continuous although probably more strident on the Pakistan side. The Kashmir question is momentarily quiescent although its return to the Security Council will fan the flames of Pakistani irritation and frustration. The canal waters question is more explosive with its psychological “life or death” connotation and at present is undoubtedly the most dangerous issue between India and Pakistan.
The Prime Minister’s visit to Turkey was highly successful and one would hope that as Pakistan’s relations with Turkey tighten and as Pakistan comes to be seen as playing an important role in Middle Eastern affairs, obsessions over India will diminish. It would be too much, however, to expect such a development soon. Some participation by Pakistan in a Southeast Asia defense organization, even though the contribution were [was] a token one, would enhance Pakistan’s international prestige and consequently help also to soften the jealous bitterness felt for India.
To sum up: in spite of East Bengal, provincialism, constitutional difficulties, Muslim League incompetence, political immaturity, and vexing international problems, the Embassy believes that political stability can be maintained by the present ruling group. An economic crisis will of course seriously affect this stability and therefore economic and political factors cannot be divorced from each other.
Economic factors. The Embassy has in its reports described to the Department the developing economic situation as deduced from facts available to the Embassy and from statements made by officials of the Government of Pakistan. The Embassy has expressed its conviction of the seriousness of a situation created by a widening gap between the financial capacity of the Government and its essential requirements for minimum consumer demands (Embtel 5, July 1). Pending the receipt of additional data and further study of the situation, one cannot yet estimate the quantity and nature of assistance needed to fill this gap. Neither is it yet possible to estimate the degree to which the present crisis is a temporary emergency or a continuing deficiency.
Pakistan’s basic economy suffers from its dependence on two cash crops, jute and cotton, from its lack of self-sufficiency in consumers’ goods, and from its lack of basic industrial raw materials. The Finance Minister has stated that Pakistan will be self-sufficient in textiles within a year and that many other consumers’ items, now imported, will be available from indigenous production. This appears at the moment to be somewhat over-optimistic. The discovery of natural gas in the country is an economic asset of great importance. Should oil exploration [Page 1854] now being undertaken be successful, the economic benefit to the country would be of major importance. Given reasonable expectations of crops, production, and markets, Pakistan’s economy should survive and gradually improve. Immediate needs are certain. How they can be met and how assistance will affect the future economy of the country must be the subject of the most careful study.
Nevertheless, the emergence of the present economic crisis points up underlying weaknesses that will endure for some time. To the degree that urgent economic problems exist both political and military stability is lessened. It would appear now that the probable cost to the United States of meeting the minimum needs arising out of this situation and from the probable necessity of economic aid in support of direct military assistance is of an order of magnitude well in excess of present levels of United States aid. This probable cost must be considered in conjunction with the basic decisions as to Pakistan’s place in United States policy plans for Asia, referred to elsewhere.
Military factors. Signing the military aid agreement has placed Pakistan and the United States in a position of military partnership, or so at least this event is interpreted by Pakistan. Once the high hopes of Pakistan’s commanders-in-chief for a two-billion dollar commitment by the United States had been dashed in the initial discussions with the Military Survey Team, General Ayub and his associates have looked to the senior partner, the United States, for guidance and instructions. Now that they have signed the contract, they ask to be assigned a role. They express impatience and frustration that the United States has not outlined to the Pakistan military its strategic concept for the area in which the Pakistan armed forces are to play a part.
In the meantime, several developments have taken place. The Prime Minister has stated that he took the line in Turkey that the two countries should make joint plans which would be submitted to the United States (Embassy telegram No. 18).3 The Pakistanis would then say to the United States: “If you give us this much, we can do so-and-so; if you give us some other amount, we can do something else.” The United Kingdom has invited representatives of the Pakistani armed forces to discuss Middle East defense problems in London; General Ayub leaves for the U.K. in August. We have expressed the hope that conclusions will be tentative, so that these can fit into later discussions which may take place between the United States and the United Kingdom and Pakistan (Department’s telegram No. 1138).3
In making the final decision as to how far the United States is prepared to underwrite Pakistan, the political, economic, and military factors must be considered together. Each is of great importance and each is inextricably linked with the other two. Previous decisions to assist Pakistan, whether by wheat, techniques, or arms, have been [Page 1855] predicated on a belief in the survival of Pakistan and in its potential development as a firm member of the free world. (Probably, the decision to give military aid was both hastened and influenced by the public statements of Mr. Nehru which made a refusal difficult for self-respecting sovereign nations.) The Embassy sees no reason to alter this judgment. It does, however, urge that as by each step we become more involved with the destinies of Pakistan, we analyze our objectives and our possible ultimate goals. We furthermore believe that if we increase our investment in Pakistan substantially we would be justified in putting more pressure on the GOP to be more realistic in their own economic thinking and action. In order to become too strong too quickly, Pakistan is trying to move too fast and present us with the bill therefor. On the other hand, the present strongly pro-American administration puts great pressure on us for immediate economic help in order to protect its political prestige. In view of the lack of any signs of other political leaders, or knowledge of their sympathies if they should appear, the prestige of the current administration is a real asset to the best interests of the United States Government.
In raising the basic questions discussed in this despatch, the Embassy is fully aware that they cannot be answered quickly. In fact, time and experience may be necessary before even tentative answers can be formulated. Nevertheless for the long pull it is believed that the importance of the questions is sufficient for them to be considered by the Policy Planning Staff and finally by the National Security Council.
Insofar as it is possible, the United States should be able to envisage what is to be expected of Pakistan. The Embassy believes Pakistan to be a tolerable risk. However, we believe our investment should be scrutinized with unrelenting care. Prospects of returns must be compared with those expected from India and from Pakistan’s Middle Eastern neighbors. American influence in Pakistan is increasing through decisions already taken. With influence comes responsibility. As we prepare to assist Pakistan to meet a critical economic emergency—and the Embassy recommends that we do give some assistance—let us carefully appraise what we can and should do in Pakistan over a several-year period.